Liability of the Nursing home’s Governing Body

OBRA is the federal regulations that establish the standard of care in nursing home facilities that receive Medicare or Medicaid. In those regulations, the below section clearly establishes that the governing body is ultimately responsible for how the nursing home is operated and managed.

42 CFR 483.75 provides:

(d) Governing body. (1) The facility must have a governing body, or
designated persons functioning as a governing body, that is legally
responsible for establishing and implementing policies regarding the
management and operation of the facility; and
(2) The governing body appoints the administrator who is–
(i) Licensed by the State where licensing is required; and
(ii) Responsible for management of the facility.

Canavan v. Nat’l Healthcare, 889 So.2d 825, 2004 Fla. App. holds that the governing body may be liable under this regulation.

Here is the relevant portion of the opinion:

The Estate argues that the concept of piercing the corporate veil does not apply in the case of a tort, and that it presented sufficient evidence of Friedbauer’s negligence, by act or omission, for the jury to reasonably conclude that Friedbauer caused harm to Canavan.

It argues that Friedbauer had the responsibility of approving the budget for the nursing home. He also functioned as the sole member of the “governing body” of the nursing home, and pursuant to federal regulation, 42 C.F.R. § 483.75(d) (2002), the governing body is legally responsible for establishing and implementing policies regarding the management and operation of the facility and for appointing the administrator who is responsible for the management of the facility. Friedbauer was thus required by federal mandate to create, approve, and implement the facility’s policies and procedures. Because he ignored complaints of inadequate staffing while cutting the operating expenses, and because the problems Canavan suffered, pressure sores, infections, poor hygiene, malnutrition and dehydration, were the direct result of understaffing, the Estate argues that a reasonable jury could have found that Friedbauer’s elevation of profit over patient care was negligent.

We review the granting of a directed verdict by viewing the evidence and all inferences of fact in the light most favorable to the nonmoving party, and we can affirm a directed verdict only where no proper view of the evidence could sustain a verdict in favor of the nonmoving party. Owens v. Publix Supermarkets, Inc., 802 So. 2d 315, 329 (Fla. 2001). We conclude that the trial court erred in granting the directed verdict because there was evidence by which the jury could have found that Freidbauer’s negligence in ignoring the documented problems at the facility contributed to the harm suffered by Canavan. This was not a case in which the plaintiffs were required to pierce the corporate veil in order to establish individual liability because Friedbauer’s alleged negligence constituted tortious conduct, which is not shielded from individual liability. See Fla. Specialty, Inc. v. H 2 Ology, Inc., 742 So. 2d 523, 527 (Fla. 1st DCA 1999) (stating that officers of a corporation may be held liable for their own torts even if such acts are performed as corporate officers); McElveen v. Peeler, 544 So. 2d 270 (Fla. 1st DCA 1989); Orlovsky v. Solid Surf, Inc., 405 So. 2d 1363, 1364 (Fla. 4th DCA 1981). We, therefore, reverse the order granting the directed verdict and remand for a new trial against Friedbauer.